nt assets 50 665 291 33 034 742

(1)

Annual Financial Statements for

ephone number:

Auditor General ontact at provincial

012 315 5103 Unathi Ndobeni ephone number:

ontact at National

332 647 400 mail address:

mail address:

ephone number:

nomfundo.shongwe@kzntreasury.gov.za

unathi.ndobeni@treasury.gov.za J.H. DE KLERK

S.B. NKOSI 358 745 500

mm@zululand.org.za

NOMFUNDO SHONGWE 033 897 4423

hief Financial Officer:

mail address:

Municipal Manager:

ZULULAND DISTRICT MUNICIPALITY for the year ended 30 June 2016

ephone number:

JonathanS@agsa.co.za

Contact Information:

KwaZulu Natal Province:

mail address:

elevant Auditor:

(2)

(3)

(4)

(5)

1

GENERAL INFORMATION MEMBERS OF THE COUNCIL

Cllr MA Hlatshwayo Mayor

Cllr V O Mbuyisa Speaker

Cllr SE Qwabe Deputy Mayor

Cllr S Ntombela Member of the Executive Committee

Cllr B B Zwane Member of the Executive Committee

Cllr ME Khumalo Member of the Executive Committee

Cllr S E Nkwanyana Member of the Executive Committee

Cllr SR Nkosi Member

Cllr M M Mntungwa Member

Cllr M B Mabaso Member

Cllr ZS Buthelezi Member

Cllr R B Mhlungu Member

Cllr N J Mjaja Member

Cllr Z Siyaya Member

Cllr T B Lukhele Member

Cllr SJ Zulu Member

Cllr BJ Mncwango Member

Cllr BC Nhlabathi Member

Cllr KE Nxumalo Member

Cllr IA Mbatha Member

Cllr NM Nhlabathi Member

Cllr RM Zulu Member

Cllr MT Lushaba Member

Cllr NF Zulu Member

Cllr MS Ntshangase Member

Cllr ISM Hadebe Member

Cllr ME Buthelezi Member

Cllr Mkhize TK Member

Cllr Ximba SP Member

Cllr TL Khumalo Member

Cllr PTAN Buthelezi Member

Cllr LS Dumakude Member

Cllr N Xaba Member

Cllr TJ Khumalo Member

Cllr Dlamini QM Member

ZULULAND DISTRICT MUNICIPALITY for the year ended 30 June 2016 ANNUAL FINANCIAL STATEMENTS

(6)

2

(7)

3

(8)

4

Note to User:

List the names of the mayor, speaker, members, etc.

(9)

5

(10)

6

(11)

2

ZULULAND DISTRICT MUNICIPALITY B-400 GAGANE STREET

ULUNDI 3838

PRIVATE BAG X76 ULUNDI

3838

035 874 5500 035 874 5589/91 mm@zululand.org.za ICT MUNICIPALITY IAL STATEMENTS

ed 30 June 2016

(12)

3

(13)

4

(14)

5

(15)

6

(16)

7

(17)

3

s

insert date of signature of financial statements ZULULAND DISTRICT MUNICIPALITY

se annual financial statements, which are set out on pages 4 to 52, in terms of Section

ent Act and which I have signed on behalf of the Municipality.

nefits of Councillors, as disclosed in note 25 of these annual financial statements are within d in Section 219 of the Constitution, read with the Remuneration of Public Officer Bearers

ance and Traditional Affairs determination in accordance with this Act.

_______________________________

for the year ended 30 June 2016 ANNUAL FINANCIAL STATEMENTS

(18)

Page

rmation 1-2

Financial statements 3

f Financial Position 4

f Financial Performance 5

f Changes in Net Assets 6

Statement 7

Comparison of Budget and Actual Amounts 8

Policies 9-20

Financial Statements 21-43

Schedule of External Loans 44

Analysis of Property, Plant and Equipment 44-47

Analysis of Heritage Assets 48-49

Segmental Analysis of Property, Plant and Equipment 50 Segmental Statement of Financial Performance 51

Grants & Subsidies Received 52

Statement of Comparative and Actual Information for the year ended 30 June 2016 ZULULAND DISTRICT MUNICIPALITY

ANNUAL FINANCIAL STATEMENTS

3

(19)

4

Note 2016 2015

R R

TS

nt assets 50 665 291 33 034 742

and cash equivalents 2 6 000 6 000 receivables from exchange transactions 3.1. 12 198 989 8 103 144 receivables from exchange transactions 3.2. 207 762 177 118 receivables from non-exchange transactions 4 & 38 5 538 033 12 956 283

tories 5 4 066 850 5 507 329

yments 6 922 664 759 931

eceivable 13 27 724 994 5 524 936

current assets 2 586 974 674 2 262 620 865

urrent receivables 7 6 229 693 5 224 345 rty, plant and equipment 8 2 579 189 307 2 255 671 316

ge assets 9 1 151 452 1 151 452

gible assets 10 404 222 573 752

ed benefit plan asset 52

assets 2 637 639 965 2 295 655 606

LITIES

nt liabilities 120 977 644 140 615 298

and other payables from exchange transactions 11 60 071 753 76 632 228

umer deposits 12 3 334 106 3 329 844

nt provisions 14 10 554 390 14 959 244

overdraft 2 33 437 872 45 486 859

ayable 12 -

bles from non-exchange transactions 15 13 579 523 207 123 current liabilities 19 562 420 15 738 325 l deposits held 17 2 420 5 325 etirement benefit obligations 39 19 560 000 15 733 000

liabilities 140 540 063 156 353 622

ssets 2 497 099 902 2 139 301 984

ASSETS

mulated surplus / (deficit) 2 497 099 902 2 139 301 984

net assets 2 497 099 902 2 139 301 984

-0.00

-

- -

ZULULAND DISTRICT MUNICIPALITY STATEMENT OF FINANCIAL POSITION

as at 30 June 2016

(20)

5

(21)

6

(22)

7 -17 630 549

audited dt ct final

-

6 000 6 000

-4 095 845

8 103 144 8 103 144

-30 644

177 118 177 118

7 418 251

12 956 283 12 956 283

1 440 479

5 507 329 5 507 329

-162 733

759 931 759 931

-22 200 058

5 524 936 5 524 936

-

- -

-

- -

-324 353 810

-

-1 005 349

5 224 345 5 224 345

-323 517 991

2 255 671 316 1 607 981 -0 2 257 279 297

-

1 151 452 3 226 1 154 678

169 530

573 752 3 226 576 978

-

- -

-

- -

341 984 359

324 353 810 2 295 655 606 2 297 270 039

-

- -

-

- -

-19 637 654

-

-16 560 475

76 828 090 195 862 76 632 228

4 262

3 329 844 3 329 844

-4 404 854

14 959 244 14 959 244

-12 048 987

45 486 859 45 486 859

-

- -

13 372 399

207 123 207 123

-

- -

3 824 095

-

-2 905

5 325 5 325

3 827 000

15 733 000 15 733 000

-

- -

-

- -

-15 813 559

-35 451 213 156 549 484 156 549 484

-

- -

357 797 918

359 805 022 2 139 106 122 - - 2 140 720 554

-

- -

-

- -

357 797 918

-357 797 918 2 146 217 224 -6 915 238 2 140 720 554

-

- -

-

- -

357 797 918

-357 797 918 2 146 217 224 2 140 720 554

-

- -

-

2 007 104 -7 111 102 1 803 843 -6 908 786 -

######### -

-0.00

#########

(23)

8

(24)

9

(25)

5

Note 2016 2015 2014

R R

e from Exchange Transactions 33 510 640 43 547 912

charges 18 25 445 343 29 948 179 26 899 025

of facilities and equipment 19 168 908 178 377 119 418 earned - external investments 20 3 617 095 2 037 921 6 980 485 venue from exchange transactions 23 4 279 294 3 701 241 2 533 754

al of contribution to doubtful debts 3 7 682 194

e from Non-Exchange Transactions 862 928 809 659 487 058

ment grants and subsidies received 22.1 862 901 048 659 449 094 673 040 161 venue from non-exchange 22.2 27 761 37 964 27 864

venue 896 439 449 703 034 970 709 600 706

ee related costs es 24 153 875 023 144 055 908 128 570 712

eration of councillors 25 6 634 007 6 221 335 6 191 361 ution to Doubtful debts 3 3 637 349 - 6 416 307 ation and amortisation expense 26.1 53 097 602 45 070 211 29 700 571 and maintenance 26.2 29 008 536 41 115 042 47 091 156

bts 50 1 344 707 8 246 053

ee benefits 39 3 827 000 15 733 000 - ater purification and Sewer Treatment 28 68 954 292 74 180 428 76 016 153

ted services 29 16 206 932 14 862 961 13 428 612

and subsidies paid 30 - 200 000 1 829 239

expenses 31 202 136 693 204 716 127 212 653 951

xpenses 538 722 141 554 401 066 521 898 061

n sale of assets 32 83 837 167 119 23 291

al Loss Recovered 42 1 097 113 1 000 000

s / (deficit) for the period 357 801 145 149 898 135 188 725 936

ZULULAND DISTRICT MUNICIPALITY STATEMENT OF FINANCIAL PERFORMANCE

for the year ending 30 June 2016

(26)

6

(27)

7

(28)

6

DETAILS Accumulated

Surplus/(Deficit)

Note R

Balance at 30 June 2014 1 995 801 301

Correction of prior period error 38

627 944

Restated Balance at 30 June 2014 1 996 429 245

Transfers to accumulated surplus

517 785

Surplus / (deficit) for the period - 2014/15

149 898 135

Balance at 30 June 2015 2 146 845 166

Correction of prior period error 38

(7 543 182)

Restated Balance at 30 June 2015 2 139 301 984

Other movements

(3 227)

Surplus / (deficit) for the period

357 801 145

Balance at 30 June 2016 2 497 099 902

ZULULAND DISTRICT MUNICIPALITY STATEMENT OF CHANGES IN NET ASSETS

for the year ended 30 June 2016

(29)

7

Note 2016 2015 2012

R R R

OWS FROM OPERATING ACTIVITIES

869 944 335

686 563 006 #REF! 603 946 073

33 869 944 335 686 563 006 #REF! 603 946 073

175 668 554.76

(488 973 991)

(510 894 451) #REF! (396 968 115) #REF!

33 (488 973 991) (510 894 451) 869 944 335.24 #REF! (396 968 115)

. -488 973 991.27

lows from operating activities 33 380 970 344 175 668 555 1 358 918 326.51 #REF! 206 977 958

380 970 343.97

175 668 554.76

-977 947 982.54

175 668 552.76

^#REF!

205 301 791.21

175 668 554.76

OWS FROM INVESTING ACTIVITIES #REF!

#REF!

lows from investing activities (372 748 357) (231 383 061) (230 959 211) (217 751 268) #REF!

f Property, Plant and Equipment ( 376 590 063) (233 345 000) (230 953 682) (229 802 230)

864 084 822.65

199 350 497.00

rom sale of Property, Plant and Equipment 224 611 395 346 - -

Call Deposit Accounts 3 617 095 2 037 918 - 13 252 501

of intangible assets - (471 325) (5 529) (50 088)

OWS FROM FINANCING ACTIVITIES 3 827 000 15 733 000 (0) (538 866) post retirement benefit obligations 3 827 000 15 733 000 (0) (0)

-

- #REF!

12 048 987

(39 981 507) #REF! (11 312 177)

#REF!

se / (decrease) in net cash and cash equivalents 12 048 987 (39 981 507) - (14 067 086) nd cash equivalents at beginning of period (45 480 859) (5 499 352) - 144 617 853

nd cash equivalents at end of period 34 (33 431 872) (45 480 859) - 130 550 767 -85 462 365.72

-0.00

2 754 909.42 -

-

0

ived from consumers, government and other

to employee costs, supplier and other

ZULULAND DISTRICT MUNICIPALITY CASH FLOW STATEMENT

for the year ended 30 June 2016

(30)

Description Actual 2016 Approved Budget 2016 Adjustments Final Budget 2016 Difference Comments Revenue

Service charges 25 445 343 31 668 405 -6 223 062 25 445 343 -0

Rental of facilities and equipment 168 908 158 000 158 000 10 908 Budget was based on the last financial year's actual.

Interest earned - external investments 3 617 095 1 000 000 1 071 000 2 071 000 1 546 095 Interest is based on estimated capital investments that fluctuate during the year.

Reversal of provision for boubtful debts

Government grants and subsidies 862 901 048 834 199 000 29 367 118 863 566 118 -665 070

Other income 4 307 055 95 356 784 42 848 207 138 204 991 -133 897 936 Due to the appropiation of accumulated reserves used to finance the budget Total revenue 896 439 449 962 382 190 67 063 263 1 029 445 453 133 006 004

-

Expenses - -

Employee related costs 153 875 023 149 580 695 12 997 496 162 578 191 8 703 168

savings was reallocated to salaries to cater for salaries morethan budget and it includes employee benefits

Remuneration of councilors 6 634 007 6 175 455 150 000 6 325 455 -308 552

Bad debts 1 344 707 - -1 344 707 Based on actual debt impairment

Depreciation and amortisation expense 53 097 602 32 565 000 16 100 000 48 665 000 -4 432 602

Other Assets are purchased at different intervals during the year and some were not capitalised since they are still in progress .

Repairs and maintenance 29 008 536 34 035 000 34 035 000 5 026 464 Savings achieved

Employee benefits 3 827 000 - - - -3 827 000 No budget for employee benefits

Bulk Water purification and Sewer Treatment 68 954 292 84 868 000 -5 000 000 79 868 000 10 913 708

bulk water purchases is fully spent as a results of refurbishment works conducted at the plants. The firgure on the AFS exclude VAT but Budget include VAT Contracted services 16 206 932 13 348 000 5 763 182 19 111 182 2 904 250 There are savings in the budget

Grants and subsidies paid - 1 861 000 -1 831 000 30 000 30 000

Funded organisations could not prove prior year expenditure and it was agreed that money will not be transferred Contribution to doutful debts 3 637 349 - - - -

General expenses 202 136 693 136 563 040 7 289 827 143 852 867 -58 283 826

Rural sanitation budget is not allocated to operating budget since its capital in nature, but does not qualify to be an asset, that resulted to the expenditure being operating and inclued in the

financial performance -

Total expense 538 722 141 458 996 190 35 469 505 494 465 695 -40 619 097 Gains / (losses) on sale of assets 83 837 - - - - Financial Loss Recovered - - - - - - Suplus/ (Deficit) for the period 357 801 146 503 386 000 31 593 758 534 979 758 173 625 100

8

202 136 692.70

Budget Statement

202 136 692.70

I/S

-

diff-1 3 293 050.49

paid annual leave -3 293 050.49

diff-2

ZULULAND DISTRICT MUNICIPALITY

STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS

June 2016

(31)

(32)

(33)

(34)

9

1 ACCOUNTING POLICIES

1.1 BASIS OF ACCOUNTING

1.1.1 BASIS OF PRESENTATION

1.2 PRESENTATION CURRENCY

1.2.1 Significant judgements and sources of estimation uncertainty

Fair value estimation

Impairment testing

Provisions

1.3 GOING CONCERN ASSUMPTION

1.4 COMPARATIVE INFORMATION

When the presentation or classification of items in the annual financial statements is amended, prior period comparative amounts are restated. The nature and reason for the reclassification is disclosed. Where accounting errors have been identified in the current year, the correction is made retrospectively as far as is practicable, and the prior year comparatives are restated accordingly. Where there has been a change in accounting policy in the current year, the adjustment is made retrospectively as far as is practicable, and the prior year comparatives are restated accordingly.

The following standards, amendments to standards and interpretations have been issued but are not yet effective and have not been early adopted by the municipality:

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES for the year ending 30 June 2016

The annual financial statements have been prepared on an accrual basis of accounting and are in accordance with historical cost convention unless specified otherwise.

The annual financial statements have been prepared in accordance with the Standards of Generally Recognised Accounting Practices (GRAP) issued by the Accounting Standards Board in accordance with Section 122(3) of the Municipal Finance Management Act,(Act No 56 of 2003).

Accounting policies for material transactions, events or conditions not covered by the GRAP Standards have been developed in accordance with paragraphs 7,11 and 12 of GRAP 3.These accounting policies and the applicable disclosures have been based on the South African Statements of Generally Accepted Accounting Practices (SA GAAP) including any interpretations of such Statements issued by the Accounting Practices Board.

A summary of the significant accounting policies, which have been consistently applied except where a transitional provision has been granted are disclosed below.

These annual financial statements are presented in South African Rand, which is the functional currency of the municipality.

These annual financial statements have been prepared on the assumption that the municipality will continue to operate as a going concern for at least the next 12 months. The assessment is disclosed in AFS note 51

In preparing the annual financial statements, management is required to make estimates and assumptions that affect the amounts represented in the annual financial statements and related disclosures. Use of available information and the application of judgements is inherent in the formation of estimates. Actual results in the future could differ from these estimates which may be material to the annual financial statements. Significant judgements include:

The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the municipality for similar financial instruments.

The recoverable amount of cash-generating units and individual assets have been determined based on the higher of value-in-use calculations and fair values less costs to sell. These calculations require the use of estimates and assumptions. It is reasonably possible that the assumption may change which may then impact our estimations and may then require a material adjustment to the carrying value of goodwill and tangible assets.

The municipality reviews and tests the carrying value of assets when events or changes in circumstances suggest that the carrying amount may not be recoverable. In addition, goodwill is tested on an annual basis for impairment. Assets are grouped at the lowest level for which identifiable cash flows are largely independent of cash flows of other assets and liabilities. if there are indications that impairment may have occurred, estimates are prepared of expected future cash flows for each group of assets. Expected future cash flows used to determine the value in use of goodwill and tangible assets are inherently uncertain and could materially change over time. they are significantly affected by number of factors.

Provisions were raised and management determined an estimate based on the information available. Additional disclosure of these estimates of provisions are included in note 14 - Current Provisions.

(35)

10

1.5

Standard number GRAP 18

GRAP 20 GRAP 32 GRAP 105 GRAP 106 GRAP 107

GRAP 108 Statutory Receivables No effective date

No effective date

No effective date No effective date The presentation and classification of items in the current year is consistent with prior periods.

STANDARDS, AMENDMENTS TO STANDARDS AND INTERPRETATIONS ISSUED BUT NOT YET EFFECTIVE

The following Standards of GRAP have been issued by the Accounting Standards Board but have not been given an effective date by the Minister of Finance. The entity has not early- adopted any of these new Standards or amendments thereto, but has referred to them for guidance in the development of accounting policies in accordance with GRAP 3 as read with Directive 5.

Standard name

No effective date

Effective date (if applicable) Segment Reporting

Related Party Disclosures

Transfer of Functions Between Entities Under Common Control Transfer of Functions Between Entities Not Under Common Control

Mergers No effective date

Service Concessions Arrangement Grantor No effective date

(36)

11

GRAP 18: SEGMENT REPORTING

GRAP 20: RELATED PARTY DISCLOSURES

GRAP 25: EMPLOYEE BENEFITS

GRAP 31: INTANGIBLE ASSETS

GRAP 105: TRANSFERS OF FUNCTIONS BETWEEN ENTITIES UNDER COMMON CONTROL

GRAP 106: TRANSFERS OF FUNCTIONS BETWEEN ENTITIES NOT UNDER COMMON CONTROL

GRAP 107: MERGERS

Impact on the municipality's financial statements once implemented:

Segments are identified by the way in which information is reported to management, both for purposes of assessing performance and making decisions about how future resources will be allocated to the various activities undertaken by the municipality. The major classifications of activities identified in budget documentation will usually reflect the segments for which a municipality reports information to management.

Segment information is either presented based on service or geographical segments. Service segments relate to a distinguishable component of a municipality that provides specific outputs or achieves particular operating objectives that are in line with the municipality’s overall mission. Geographical segments relate to specific outputs generated, or particular objectives achieved, by a municipality within a particular region.

The adoption of this standard is not expected to impact on the results of the municipality, but may result in more disclosure than is currently provided in the financial statements.

The objective of this Standard of GRAP is to ensure that a municipality’s financial statements contain the disclosures necessary to draw attention to the possibility that its financial position and surplus or deficit may have been affected by the existence of related parties and by transactions and outstanding balances with such parties.

It is unlikely that the standard will have a material impact on the municipality's financial statements.

For the year under review, the municipality has applied IPSAS 20.

The objective of this standard is to prescribe the accounting and disclosure for employee benefits. The major difference between this Standard of GRAP and IAS 19 is with regards to the treatment of actuarial gains and losses and past service costs. This Standard of GRAP requires a municipality to recognise all actuarial gains and losses and past service costs

immediately in the statement of financial performance once occurred.

The effective date of the standard is for years beginning on or after 01 April 2013. The municipality expects to adopt the standard for the first time in the 2014 financial statements.

The municipality expects to adopt the standard once it becomes effective.

The impact of this amendment is currently being assessed.

The objective of this Standard of GRAP is to establish accounting principles for the combined municipality and combining municipalities in a merger.

The municipality expects to adopt the standard once it becomes effective.

The impact of this standard is currently being assessed.

This Standard of GRAP replaces the previous Standard of GRAP on Intangible Assets (GRAP 102) due to the IPSASB that has issued an IPSAS on Intangible Assets (IPSAS 31).

The effective date of the standard is for years beginning on or after 01 April 2013.

There is no impact of the standard on adoption.

The municipality expects to adopt the standard for the first time once it becomes effective.

The objective of this Standard of GRAP is to establish accounting principles for the acquirer and transferor in a transfer of functions between municipalities under common control.

The objective of this Standard of GRAP is to establish accounting principles for the acquirer and transferor in a transfer of functions between municipalities not under common control.

(37)

12

1.6

PROPERTY, PLANT AND EQUIPMENT 1.6.1 INITIAL RECOGNITION

1.6.2 SUBSEQUENT MEASUREMENT - COST MODEL

1.6.3 DEPRECIATION AND IMPAIRMENT

The annual depreciation rates are based on the following estimated average asset lives:

Infrastructure

Water 15-70 years

Sewerage 15-70 years

Community

Buildings 30 years

Recreational Facilities 20-30 years

When significant components of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. The major components are depreciated separately over their useful lives.

Where an asset is acquired by the municipality for no consideration (i.e. a non-exchange transaction), the cost is deemed to be equal to the fair value of that asset on the date acquired.

Where an item of property, plant and equipment is acquired in exchange for a non-monetary asset or monetary assets, or a combination of monetary and non-monetary assets, the asset acquired is initially measured at fair value (the cost). If the acquired item's fair value was not determinable, it's deemed cost is the carrying amount of the asset(s) given up.

Major spare parts and servicing equipment qualify as property, plant and equipment when the municipality expects to use them during more than one period. Similarly, if the major spare parts and servicing equipment can be used only in connection with an item of property, plant and equipment, they are accounted for as property, plant and equipment.

Property, plant and equipment are tangible non-current assets (including infrastructure assets) that are held for use in the production or supply of goods or services, rental to others, or for administrative purposes, and are expected to be used during more than one year. Items of property, plant and equipment are initially recognised as assets on acquisition date and are initially recorded at cost. The cost of an item of property, plant and equipment is the purchase price and other costs attributable to bring the asset to the location and condition necessary for it to be capable of operating in the manner intended by the municipality. Trade discounts and rebates are deducted in arriving at the cost. The cost also includes the necessary costs of dismantling and removing the asset and restoring the site on which it is located.

Subsequent to initial recognition, items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses. Land is not depreciated as it is deemed to have indefinite useful life.

Where the municipality replaces parts of an asset, it derecognises the part of the asset being replaced and capitalises the new component. Subsequent expenditure incurred on an asset is capitalised when it increases the capacity or future economic benefits associated with the asset.

Depreciation is calculated on the depreciable amount, using the straight-line method over the estimated useful lives of the assets. Components of assets that are significant in relation to the whole asset and that have different useful lives are depreciated separately. Depreciation on new acquisitions is charged to the statement of financial performance in the financial year in which the asset is available for use after taking into account the an assets' residual value where applicable.

(38)

13

(39)

14

(40)

15

(41)

16

(42)

MFMA & standards ref:

REFERENCE

Note 2016 2015 2 012

R R R

CASH AND CASH EQUIVALENTS IAS 39

Cash and cash equivalents consist of the following:

Cash on hand 6 000 6 000 5 000

Call deposits - - 170 021 780

6 000

6 000 170 026 780 The Municipality has the following bank accounts: -

MFMA S125 (2) (a) Current Account (Primary Bank Account)

ABSA BANK-KZN Public Sector Branch: 4047162045

Cash book balance at beginning of year (45 486 859.0) (5 499 352) -30 395 497

Cash book balance at end of year -33 437 872.45 - -39 476 013

Bank statement balance at beginning of year - 11 200 997 51 885 662 Bank statement balance at end of year - - 55 427 514

Cash on hand 6 000 6 000 5 000

2 257 396 519.73

Total cash and cash equivalents 6 000 6 000 170 026 780 -45 070 211.33

2 917 681 405.99

Total bank overdraft 33 437 872 45 486 859 39 476 013 5 130 007 714.39

Call Accounts

Absa Bank (20-7293-6439) - - 95 021 780 85 008 351.00

First National Bank (IDS3607016) - - 65 000 000

Standard Bank (9864660) - - 10 000 000

Investec - - -

Total - - 170 021 780

TRADE AND OTHER RECEIVABLES FROM EXCHANGE TRANSACTIONS Gross Balances Provision for doubtful Debts Net Balance GRAP 1

Trade receivables R R R IAS 39

as at 30 June 2016

Service debtors (Water and Sanitation) 72 199 357 60 000 368 12 198 989 64 466 163.12 64 466 163.12 640 529.39

-640 529.39

Total 72 199 357 60 000 368 12 198 989 63 825 633.73 63 825 633.73

42 268 470.54

as at 30 June 2015 21 557 163.19

63 825 633.73

Service debtors (Water and Sanitation) 64 466 163 56 363 019 8 103 144 640 529.39

-

64 466 163.12

Total 64 466 163 56 363 019 8 103 144 12 198 989 6 989 827

64 466 163

56 363 019 8 103 144 5 209 162 3 405 457

21

1 803 705

NOTE TO USER: THESE NOTE AND SHOULD BE TAILORED TO MUNICIPALITY. PAY PARTICUL BLUE - THESE ARE EXAMPLES USER. HOWEVER, ALL THE DIS

AND N ZULULAND DISTRICT MUNICIPALITY

NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2016

(43)

REFERENCE

Note 2016 2015 2 012

R R R

NOTE TO USER: THESE NOTE AND SHOULD BE TAILORED TO MUNICIPALITY. PAY PARTICUL BLUE - THESE ARE EXAMPLES

Water and Sewerage: Ageing

Current (0 – 30 days) 5 189 669 2 686 613

31 - 60 Days 2 652 065 1 765 851

61 - 90 Days 1 230 273 1 719 592

91 - 120 Days 1 600 580 1 592 412

121 - 365 Days 61 526 770 9 677 446

+ 365 Days - 47 024 249

Total 72 199 357 64 466 163

Summary of Debtors by Customer Classification Consumers Industrial/Commercial National & Provincial

Government

R R

as at 30 June 2016

Current (0 – 30 days) 3 571 945 459 710 1 158 014

31 - 60 Days 1 866 836 199 459 585 770

61 - 90 Days 890 843 81 784 257 646

91 - 120 Days 1 097 935 210 816 291 829

121 - 365 Days 53 871 774 799 950 6 855 046

+ 365 Days - - -

Sub-total 61 299 333 1 751 719 9 148 305

Less: Provision for doubtful debts

Total debtors by customer classification 61 299 333 1 751 719 9 148 305 72 199 357

as at 30 June 2015

Current (0 – 30 days) 1 179 772 600 913 905 928 2 686 613

31 - 60 Days 941 868 308 320 515 663

61 - 90 Days 973 638 264 356 481 598 21 960 263.56

91 - 120 Days 937 708 374 090 280 615 2 658 144.76

121 - 365 Days 7 546 429 1 026 436 1 104 581 24 618 408.32

+ 365 Days 43 150 838 1 183 754 2 689 656

Sub-total 54 730 252 3 757 869 5 978 042 64 466 163 Less: Provision for doubtful debts

Total debtors by customer classification 54 730 252 3 757 869 5 978 042 64 466 163

IFRS 7 (ED 52) Reconciliation of the doubtful debt provision

Balance at beginning of the year 56 363 021 64 045 215 26 851 129

Contributions to provision 3 637 349 - 14 996 451

Reversal of provision - (7 682 194) -234 401

Total 60 000 370 56 363 021

Balance at end of year 60 000 370 56 363 021 41 613 179

-

Trade and other receivables past due but not impaired IFRS 7 (ED 52)

Trade and other receivables which are regular payers with amounts owing less than 60 days past due are not considered to be impaired. At 30 June 2016, R12 198 989- (2015: R8 103 144) were past due but not impaired.

The ageing of amounts past due but not impaired is as follows:

Less than 60 days past due 3 237 428 1 304 452 825 097

Less than 180 days past due 8 961 560 6 798 692 3 148 052

12 198 989

8 103 144 3 973 149 22

Note:The total should agree to the Gros included in the note above.

Note:The total should agree to the Grossam included in the note above.

Note:The provision figure inputted m

Note:The provision figure inputted must be negative

(44)

REFERENCE

Note 2016 2015 2 012

R R R

NOTE TO USER: THESE NOTE AND SHOULD BE TAILORED TO MUNICIPALITY. PAY PARTICUL BLUE - THESE ARE EXAMPLES

Trade and other receivables impaired 8 961 560 IFRS 7 (ED 52)

8 961 560

As of 30 June 2015, trade and other receivables of R56 363 021 - (2015: R56 363

019) were impaired and provided for. 60 000 370 56 363 021 56 363 019

The ageing of these receivables is as follows: 5 072 460.51

3 to 6 months 6 599 613.57 5 072 463 8 487 882 51 290 558.52

Over 6 months 53 400 754.36 51 290 559 33 125 297 60 000 367.93

The fair value of trade and other receivables approximates their carrying amounts.

OTHER RECEIVABLES FROM EXCHANGE TRANSACTIONS

Debtor: Ondini Motors 5 606 -

Debtor: Avis 14 751 5 364

Debtor: Waphatha Group Pty Ltd 12 184 18 774

Debtor: Imbali Elegance Tourism 32 184 16 092

Debtor: Independent Elecotoral Commission (IEC) - -

Debtor: WSSA 6 149 -

Debtor: BP Drakensburg 136 888 136 888

Total 207 762 177 118

OTHER RECEIVABLES FROM NON-EXCHANGE TRANSACTIONS IAS 39

Debtor: Interest on Investment (Call accounts) - 13 631

Debtor: Babazile Mpanza 179 300 -

Debtor: WSSA -

Debtor: BG Shawe - -

Debtor: B Mthabela 20 000 -

Debtor: S S Nkambule 5 710 17 740

Debtor: ISM Hadebe - 23 043

Debtor: Mthethwa TW Group Life - -

Debtor: JB Dlamini 18 440 18 440

Debtor: Natal Spa - -

Debtor: Insurance Claim 202 679 202 679

Debtor: Ulundi Municipality 503 854 -

Debtor: Dumbe Municipality 369 621 -

Debtor: Abaqulusi Municipality 519 266 -

Debtor: Nongoma Municipality 304 255 -

Debtor: Federal Air Lines - - Debtor: Nevlyn M 3 000 - Debtor: KZN Aviation - - Debtor: SCN Zungu 4 957 - Debtor: Young Mzizi 9 600 -

Debtor: Pongola Municipality 235 609 -

Debtor: ZM Ngwenya - 347

Bursary debtors - 6 260

Debtor: ABSA Bank 2 234 7 604

Debtor: Water Affairs 3 078 630 12 666 538

Bursary Debtor - - 11 813

Fleet: Suspense -

Other Debtors (Accrued income) 80 878 -

Total 5 538 033 12 956 283

Adjusted for Correction of Error (Note 38) - -

Total Other Debtors 5 538 033 12 956 283 11 813

(45)

ES ARE BASED ON COMMONLY APPLICABLE I O SUIT THE INDIVIDUAL CIRCUMSTANCES OF

LAR ATTENTION TO DISCLOSURES HIGHLIGHT

ONLY AND REQUIRE SIGNIFICANT INPUT FRO

SCLOSURES SHOULD BE REVIEWED FOR ACC NOT ONLY THE BLUE ITEMS.

(46)

ossamount ount

ust be negative

(47)

(48)

-

240 606 179.84

PROPERTY, PLANT AND EQUIPMENT 240 606 179.84

- Reconciliation of Carrying Value

Land Buildings Infrastructure Community Capital work in

Progress Other Assets Total

2 255 671 315.82

R R R R R R

-1 610 613

2 257 281 929.13

as at 1 July 2015 470 000 33 622 453 1 284 755 941 14 143 160 892 487 529 29 158 972 2 254 638 055 Cost/Revaluation 470 000 44 318 991 1 528 760 790 14 933 380 892 487 529 58 378 690 2 539 349 380 Accumulated depreciation and impairment losses - (10 696 538) (244 004 849) (790 220) - (29 219 717) (284 711 325)

#REF!

Opening balance as at 01 July 2016 470 000 33 622 453 1 284 755 941 14 143 160 892 487 529 29 158 972 2 254 638 055

Restatement -387 121.27

Correction of Error (Cost) - 1 126 601 63 727 - 517 785 510 572 2 218 685 Correction of Error (Accumulated depreciation) - (339 997) (19 725) - - (247 755) (607 477)

Other adjustments - - 812 584 - - (1 390 530) (577 946) Restated amount as at 01 July 2015 470 000 34 409 057 1 285 612 527 14 143 160 893 005 314 28 031 259 2 255 671 316

Transfers 370 461 897 (370 461 897) -0.00

Other movements

- Acquisitions - - 107 716 - - 482 208 589 925

Capital under Construction 376 000 138 376 000 138 376 590 063.09

Depreciation - (1 238 162) (42 625 238) (2 133 560) - (6 934 339) (52 931 298) -7 861 087.08

#REF!

Carrying value of disposals - - (33) - (140 740) (140 773) Cost/Revaluation - - (72) - (2 457 613) (2 457 685) Accumulated depreciation and impairment losses - - 39 - 2 316 873 2 316 912

-

2 580 744 980.69 -

2 580 744 980.69 as at 30 June 2016 470 000 33 170 894 1 613 556 869 12 009 600 898 543 555 21 438 388 2 579 189 307 2 580 744 980.93 Cost/Revaluation 470 000 45 445 592 1 899 394 059 14 933 380 898 543 555 56 913 856 2 915 700 442 -0.24 Transfers - - - - - -

Accumulated depreciation and impairment losses - (12 274 698) (285 837 190) (2 923 780) - (35 475 468) (336 511 135) 2 917 681 405.99 336 936 425.06

425 289.96

2 917 681 407.51

2 541 461 702.56

376 219 704.95

-336 511 135.11 -425 291.72

-240 606 179.84

24

2 165 241 997.61 ZULULAND DISTRICT MUNICIPALITY

Refer to Appendix B for more detail on property, plant and equipment

(49)

2 915 700 442.33

-

2 580 744 980.94

2 580 744 980.93

0.01 Reconciliation of Carrying Value

Land Buildings Infrastructure Community Capital work in

Progress Other Assets Total

298 105.79

R R R R R R -298 105.78

829 513.43

Restated balance at 1 July 2014 470 000 20 313 321 1 187 160 805 14 548 686 813 181 437 31 079 198 2 066 753 448 960 873.43 Cost/Revaluation 470 000 43 476 034 1 382 104 989 14 933 380 813 181 437 52 015 213 2 306 181 053 -131 360.00 reclassification 1 (9 525 760) 9 525 760 - - -

reclassification 2 (4 167 611) 3 005 775 - - 1 161 836 -

Other movements 961 062 961 062

restated opening balance at 30 june 2014 470 000 29 782 663 1 394 636 524 14 933 380 813 181 437 54 138 111 2 307 142 114 Correction of error (note 48) 597 416 13 173 429 (349 754) - (620 478) 12 800 613

-

- - - - Accumulated depreciation and impairment losses - (10 066 757) (220 649 148) (34 940) - (22 438 435) (253 189 280)

-

- - - - - -233 345 000.00 Impairment loss/Reversal of impairment loss - - - - - - 231 122 987.00 Transfers - 14 536 329 135 560 685 - (160 540 490) 5 816 589 (4 626 887) -2 222 013.00

-

Other movements* (823 871) (823 871)

Acquisitions - - - - - - -253 189 279.77 Capital under Construction - - - 239 846 582 - 239 846 582

Depreciation - (1 227 197) (35 716 622) (405 527) - (7 551 258) (44 900 604)

Carrying value of disposals - - (1 425 056) - (185 557) (1 610 613) 1 759 833 401.00 Cost/Revaluation - (1 436 419) - (1 576 011) (3 012 429)

Accumulated depreciation and impairment losses - 11 363 - 1 390 453 1 401 816 700 908.08 2 255 671 315.82

Restated balance at 1 July 2015 470 000 33 622 453 1 284 755 941 14 143 160 892 487 529 29 158 972 2 254 638 055 2 253 027 441.34 Cost/Revaluation 470 000 29 782 663 1 393 200 105 14 933 380 1 053 028 019 52 562 100 2 543 976 267 2 052 991 773.00 Transfers - 14 536 329 135 560 685 - (160 540 490) 5 816 589 (4 626 887)

Accumulated depreciation and impairment losses - (10 696 538) (244 004 849) (790 220) - (29 219 717) (284 711 325)

Reclassification

1. The amount of 9525760 comprises of Airport Runway incorrectly included as buildings instead of being Infrastructure.

2. This amount comprises of amounts like airconditioners previously included as buildings instead of being an infrastructure and other assets

disclosed as finance lease assets that were fully

2 257 281 929.13

#REF!

Other movements 1

ZULULAND DISTRICT MUNICIPALITY NOTES TO THE FINANCIAL STATEMENTS

for the year ended 30 June 2015

Note:All figures are pulled thr

(50)

(51)

240 606 179.84

2 539 349 380

2779955560

2 539 349 379.76

2 779 955 559.60

-387 121.27

285676391.2

(53 100 829)

(55 673 502)

336 936 425.06

330 944 917 281 262 922.98

-425291.72 -1 555 673.70

(336 936 427)

Intangible

336 936 425.06

-1.76

-336 936 425.06

-

336 936 425.06

-1.76

240 606 179.84

NOTE TO USER:

AND SHOULD BE MUNICIPALITY. P

BLUE - THESE A THE USER. HO

(52)

2 915 700 442.33

-1 761 444 014.31

rough from Appendix B

(53)

(54)

HERITAGE ASSETS

Reconciliation of Carrying Value

Art collections Stamp collections Collections of rare

books or manuscripts Historical

buildings Work in

Progress Total

R R R R R

as at 1 July 2015 - - - - 1 151 452 1 151 452 Cost/Revaluation - - - - 1 151 452 1 151 452 Correction of error (note 48) - - - - - Change in accounting policy (note 47) - - - - - Accumulated depreciation and impairment losses - - - - - Acquisitions - - - - - Capital under Construction - - - - - Carrying value of disposals - - - - - Cost/Revaluation - - - - - Impairment losses - - - - - - Impairment loss/Reversal of impairment loss - - - - - Transfers - - - - - Other movements* - - - - - as at 30 June 2016 - - - - 1 151 452 1 151 452 Cost/Revaluation - - - - 1 151 452 1 151 452 Transfers - - - - - Impairment losses - - - - - -

26 ZULULAND DISTRICT MUNICIPALITY

Refer to Appendix C for more detail on Heritage Assets

(55)

Reconciliation of Carrying Value

Art collections Stamp collections Collections of rare

books or manuscripts Historical

buildings Work in

Progress Total

R R R R R

as at 1 July 2014 - - - - 1 151 452 1 151 452 Cost/Revaluation - - - - 1 151 452 1 151 452 Acquisitions - - - - - Capital under Construction - - - - - - Impairment loss/Reversal of impairment loss - - - - - Transfers - - - - -

*Other movements - -

as at 30 June 2015 - - - - 1 151 452 1 151 452 Cost/Revaluation - - - - 1 151 452 1 151 452 Impairment losses - - - - -

(56)

(57)

(58)

(59)

(60)

Note:All figures are pulled through from Appendix B

(61)

(62)

(63)

(64)

Note INTANGIBLE ASSETS

Reconciliation of carrying value Computer Software Total

R R

as at 1 July 2015 573 752 573 752

Cost 960 873 960 873

Accumulated amortisation and impairment losses (387 121) (387 121)

Acquisitions -

Amortisation (169 530) (169 530)

Other movements -

Transfers -

Carrying value of disposals - -

Cost ^{(131 360)} (131 360)

Accumulated amortisation ^{131 360} 131 360

as at 30 June 2016 404 222 404 222

Cost 829 513 829 513

Accumulated amortisation and impairment losses (425 292) (425 292)

(65)

29

ZULULAND DISTRICT MUNICIPALITY NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2015

Note 2016 2015

R R

TRADE AND OTHER PAYABLES FROM EXCHANGE TRANSACTIONS

Creditors Control Account 11 388 311 34 081 576

Bank deposits not receipted 39 531 74 249

Rental deposit: Ekhethelo 5 000 5 000

Rental deposit: Avis 2 682 2 682

Rental deposit: Waphatha Group (Pty) Ltd 2 682 2 682

Rental deposit: Imbali Elegance Tourism 2 682 2 682

CREDITOR: CIVIL CONTRACT 170 937 -

Creditor previous year/ year end 3 -

Retention 47 001 458 41 651 091

Water & Sanitation Debtors with Credit Balances 1 458 467 1 008 129

Total 60 071 753 76 828 090

Adjusted for Correction of Error (Note 38) (195 862)

Total Restated Creditors 60 071 753 76 632 228

CONSUMER DEPOSITS

Water 3 334 106 3 329 844

Total consumer deposits 3 334 106 3 329 844

ZDM does not pay interest on deposits refunded.

VAT RECEIVABLE

Vat 36 498 810 13 347 306

VAT Payable (8 773 816) (7 822 370)

Total 27 724 994 5 524 936

Vat is accounted for on the payments basis.

CURRENT PROVISIONS

Reconciliation of movement in Provision for Leave pay

Opening Balance 6 814 881 5 869 455

Provisions Raised 3 293 050 3 290 414

Amounts Used (2 860 893) (2 344 989)

Closing Balance 7 247 038 6 814 881

Reconciliation of movement in Provision for Bonuses

Opening Balance 8 144 363 -

Provisions Raised 3 307 352 8 144 363

Amounts Used (8 144 363) -

Closing Balance 3 307 352 8 144 363

Total provisions 10 554 390 14 959 244

The 2014-15 audited amount of Current Provision (R 6 814 881) was restated by 8 144 363 (bonus provision) to R 14 959 244 due to a correction of error.

OTHER PAYABLES FROM NON-EXCHANGE TRANSACTIONS

Grant Received in Advance (RBIG) 13 361 415 -

Grant Received in Advance (Indonsa Grant) 500 -

Creditors Deceased Staff (EP Zulu) - 4 444

Creditors (TW Mthethwa) 23 280 23 280

Creditors (LB Shange) 179 399 179 399

Creditors (Unverified Employees) 14 929 -

Total 13 579 523 207 123

This provision relates to total number of accumulated leave days for 572 employees of the municipality as at 30 June 2016. Hence provision is disclosed, the municipality is uncertain about the timing of these possible outflows due to the fact that municipal employees will utilised their accumulated days continuously from time-to-time in future.

(66)

30

2 012.00

44 143 096.00

72 772.00

4 283 885.00

32 814 482.00

767 367.00

82 081 602.00

(67)

43

Loan

number Redeemable

Date Balance at 30

June -1

Received during the

period

Redeemed / written off during the

period Balance at 30 June

Carrying Value of Property,

Plant &

Equipment

Other Costs in accordance with MFMA

R R R R R R

-

- - - -

-

- - - - APPENDIX A

SCHEDULE OF EXTERNAL LOANS ZULULAND DISTRICT MUNICIPALITY

as at 30 June 2016

(68)

Opening Balance Correction of

Error Other adjustment Additions Disposals Under

Construction Closing Balance Opening Balance Correction of

Error Other adjustment Depreciation

R'000 R'000 R'000 R'000 R'000 R'000 R'000

LandLand 470 000 - - - 470 000 - - - -

470 000

- - - 470 000 - - - -

Buildings 44 318 991 1 126 601 45 445 592 (10 696 538) (339 997) (1 238 162)

Infrastructure

Water & Sewerage Inst 784 642 374 63 727 107 716 (72) - 784 813 746 (160 859 066) (19 725) 812 584 (21 906 231)

Water & Sewerage Pipes 744 118 416 744 118 416 (83 145 783) (20 719 007)

-

- - -

-

- - - - 1 528 760 790

63 727 107 716 (72) - 1 528 932 162 (244 004 849) (19 725) 812 584 (42 625 238) Capital Work in Progress

Capital Work in Progress 892 487 529 517 785 - 376 000 138 1 269 005 452 - -

892 487 529

517 785 - - - 376 000 138 1 269 005 452 - - - - Community Assets

Recreation Grounds 14 933 380 - - - 14 933 380 (790 220) - (2 133 560)

14 933 380

- - - - 14 933 380 (790 220) - (2 133 560) Total carried forward 2 480 970 690 1 708 113 - 107 716 (72) 376 000 138 2 858 786 586 (255 491 608) (359 722) 812 584 (45 996 960)

44

Cost / Revaluation Accumulated Depreciation

APPENDIX B

ANALYSIS OF PROPERTY PLANT AND EQUIPMENT as at 30 June 2016